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By 2028, Iowa Employer Health Insurance Family Premiums Could Be…

As we enter the holiday season, I’m somewhat hesitant to share something that could spoil the holiday spirit – our projected health insurance premium 10 years from now. But to put a positive spin on this, especially as we prepare for Thanksgiving day, it is safe to assume the health insurance premiums that we are currently paying will be a ‘bargain’ compared to what we may be paying in 2028.

From our latest 2018 Iowa Employer Benefits Study©, we learned the average annual Iowa family health insurance premium is $17,448. Yes, this is a very inflated amount, especially when we compare it to 10 years earlier in 2008 ($11,520). Yet, this Iowa average is actually a bargain compared to the 2018 Kaiser Family Foundation national average of $19,616! Another positive spin for you!

The five-year average (2014 – 2018) increase for Iowa employer health insurance premiums is 7.7 percent. This figure represents all survey respondents, regardless of employee size and industry. It is important to acknowledge that this number represents the average increase BEFORE employers made adjustments to their health plans to keep the rate increase more manageable. Such adjustments typically include increasing deductibles, copayments and other plan features that require employees (and their dependents) to assume more of the medical costs when seeking healthcare through providers. Either way, the rate increases adversely affect employees’ the take-home pay.

The graph below calculates the average Iowa family premium rate trending forward for the next 10 years (compounded annually at 7.7%) and showing the annual employer and employee contributions (based on the Iowa employer contributing 68 percent of the total cost – another five-year average). One squeamish by-product of inflated health rates not shown on this graph are the plan design alterations that will surely be made by employers to shift costs to employees in order to keep the rates ‘manageable.’ One primary example of this cost-shifting is the family deductible, which was $1,963 in 2008 and is now at $3,900 in 2018 (99 percent increase over 10 years).

The family premium in 2028 could become $36,636! This amount is 110 percent more than today’s average family premium in Iowa.

Also worth noting, the trend line above the premium represents the estimated annual household income (HHI) in Iowa, compounded annually by 1.5% to 2028. The bubble above the $57,947 HHI for 2018 represents the percentage of family premium to HHI. This percentage is projected to almost double by 2028 if we cannot control healthcare costs. In short, over half of our household income (54 percent) could evaporate due to healthcare costs.

As we cast 10 years into the future, it is safe to give ‘thanks’ for what we are paying today in health insurance premiums. This is my best attempt to find some good in something that clearly is not.

Sorry to share this information.  Now, it’s time for the other turkey…

Have a wonderful Thanksgiving!

*DISCLAIMER:
I am NOT predicting that family premiums in Iowa will be $36k by 2028. Rather, based on past behaviors, employers will continue to find ways to alter their plan designs to keep their premiums lower than the initial increases they experience. Because of this, health plans will look considerably different in 10 years than they do today.

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Midterm Elections and Healthcare – The Consensus For Moving Forward Is…

The votes were cast and we now have a split in party control in both the House and Senate. What does this mean for healthcare as we now look toward the 2020 elections and beyond? Here are a few “bottom line” excerpts from various healthcare experts who follow the Washington political gridlock circus.

Drew Altman, President, Kaiser Family FoundationNovember 8 Blog

With a Democratic House, a Republican Senate, and President Trump in the White House, get ready for two years of maneuvering but little progress on health care – unless you look beyond Washington…Democratic control of the House stops any Republican efforts to revive their efforts to repeal and replace the Affordable Care Act, block grant Medicaid or impose a per capita cap on federal Medicaid spending…the same applies to any big changes Republicans might want to make to Medicare…the proposals made in Congress and the campaign are important because they can shape the agenda after 2020. But for now, the states are where the real action is.”

Merrill Goozner, Editor Emeritus of Modern HealthcareNovember 8 Editorial

“…Given the powerful special interests invested in preserving the status quo, the most likely scenario over the next two years is inaction on each of those issues (addressing root causes of high healthcare costs, universal healthcare, surprise bills for out-of-network charges, etc.). This year’s election offered no guidance toward a politically acceptable solution to healthcare’s core problem: its unacceptably high cost.”

Stephen Miller, Online Manager/Editor, Compensation & Benefits, Society For Human Resource Management (SHRM) – November 8 Article

Mr. Miller summarizes many thoughts from national pundits about the next two years in healthcare – much of this relates to the employer perspective on regulation. Miller writes:

“The partisan divide makes it unlikely that any major changes in the ACA will advance to the desk of President Donald Trump. That doesn’t mean bipartisan efforts to address health care challenges are off the table. Meanwhile, heading into the 2020 presidential election, progressives will continue to advocate for government-funded single-payer health care for everyone.”

The Commonwealth FundNovember 7 Analysis

“…efforts to repeal the ACA or make large-scale changes to programs like Medicaid are likely off the table, though the (Trump) administration is expected to continue to pursue actions to undermine key elements of the ACA. What we may see is congressional activity on two fronts: stabilizing the individual health insurance markets and controlling high drug prices…”

Robert Pearl, M.D., Contributor to ForbesNovember 7 Blog

Dr. Pearl finishes with a paragraph that summarizes nicely the many blogs that I have written over the past seven years:

“Looking ahead, don’t expect your healthcare to change (or improve) much over the next two years. That’s because we have confused the disease with the symptom. Rising healthcare premiums and excessive out-of-pocket expenses are not the real problem. They are the result of wasted effort, inefficiency and price-jacking among healthcare’s biggest players: drug companies, hospitals and specialists. Health insurance coverage is essential, but until we as a nation grapple with how care delivery is structured, reimbursed, technologically enabled and led, voters will remain concerned about costs, fearful of losing their coverage and confused about how best to improve healthcare in the future.”

These are just a few post-election prognostications about healthcare’s uncertain road to reform. As we know from past observation, gridlock will continue and states will work diligently to find their own solutions to both access ‘quality healthcare’ and identify cost issues.

With a special thanks to Dr. Pearl (again) from his November 2 piece in the Los Angeles Times, the following quote is most appropriate for healthcare and how it usually fares in our national and local elections:

Campaign promises are like babies: easy to make, but hard to deliver.

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Top 15 Non-Insurance Benefits Employees Desire

Top 15 Non-Insurance Benefits Desired by EmployeesThe Iowa Healthiest State Initiative’s (HSI) vision is to become the healthiest state in the nation. In 2017, based on separate national indexes that provide different measures, Iowa is ranked #15 by the America Health’s Rankings®, and #21 by the Gallup-Healthways Well-Being Index®. The pursuit of this vision is both difficult and no doubt never-ending, but well worth the effort.

According to benefits provider, Unum, who recently surveyed 1,227 working adults in the U.S., the most coveted employee benefits is time spent away from the office. When presenting survey participants with 15 perks that are non-insurance and retirement related, participants were asked to choose their top five options. Ranked by popularity, the results are:

  1. Paid Family Leave* – 58%
  2. Flexible/remote work options* – 55%
  3. Professional development* – 39%
  4. Sabbatical leave* – 38%
  5. Gym membership or onsite fitness center* – 36%
  6. Student loan repayment – 35%
  7. Onsite healthy snacks* – 28%
  8. ID theft prevention – 28%
  9. Financial planning resources – 27%
  10. Fitness goals incentives* – 18%
  11. Public transit assistance – 16%
  12. Pet insurance – 15%
  13. Pet friendly offices – 15%
  14. Health coaching* – 14%
  15. Dedicated volunteer hours* – 12%

Many of the above benefits that employees appear to value, particularly those with an asterisk (*) beside them, fit nicely with the mission as outlined by HSI:

Improving the physical, social and emotional well-being of Iowans.

As the labor market continues to tighten in Iowa and around the country, employers are constantly looking for meaningful ways to attract (and retain) qualified employees. Accordingly, I’m planning to include some of these miscellaneous (but highly-valued benefits) in the 2019 Iowa Employer Benefits Study©.  Specifically, we wish to poll employers on whether they offer various paid and unpaid leave benefits, work/life benefits, wellness and other general perks. Largely dependent on the robustness of any given employment marketplace, the availability of employee benefits tend to be more localized.

Additionally, HSI’s mission and goals fit nicely with the workplace culture that Iowa employers must continue to assess. If employers are expecting to attract and retain healthy and productive employees, there is no time like the present to begin aligning the interests and desires of their employees with the overall benefits package they provide.

The culture of any organization is very often reflective of the benefits and compensation provided to its employees. Appropriately aligning this desired culture with workplace benefits will continue to distinguish forward-thinking employers.

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